TOKYO: Japanese motorcycle maker Yamaha Motor saw its shares plunge by more than 10 percent on the Tokyo stock exchange Tuesday after its forecasts for 2011 fell short of market expectations.
Profit-taking drove the steep fall despite the motorcycle maker returning to the black in 2010, as brisk demand in Asian emerging markets more than offset the negative impact of a strong yen.
Increased sales of motorcycles in emerging markets lifted Yamaha's overall revenue as increased production and aggressive cost-cutting efforts also helped turn the company profitable, it said.
For 2010, Yamaha Motor logged a net profit of 18.3 billion yen (219 million dollars), rebounding from a loss of 216.1 billion yen in 2009.
Its operating profit reached 51.3 billion yen, reversing a 62.6 billion loss the previous year. Sales came to 1.29 trillion yen, up 12.2 percent from 1.15 trillion yen in 2009.
But investors were disappointed by the company's 2011 outlook.
Yamaha said it expects a 9.3 percent rise in net profit to 20 billion yen and a 3.3 percent rise in operating profit to 53 billion yen for the fiscal year through December -- both figures below a Nikkei forecast of 35 billion yen and 66 billion yen respectively.
Chibagin Asset Management's Yoshihiro Okumura told Dow Jones Newswires that while Yamaha is strong in Asia's emerging markets, the stock may not be attractive versus its peers as investors are focusing on how companies can tap into the North American auto market recovery.
Yamaha stocks plunged 10.55 percent to 1,525, with most of the loss made in the late session after the company's announcement during the lunch break.
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